Yet, a major consulting firm McKinsey & Co. has collected data to demonstrate the importance of the consideration set. The data show nearly straight-line correlations between a brand being in a customer’s consideration set and market share, across several categories. McKinsey & Co. states that the consideration data explains 60% to 80% of the variation in sales growth from one purchase to the next. Surprise. A customer is not likely to purchase a brand they would not consider. Common sense.

According to McKinsey & Co., brands must shift focus from spending most resources on closing the sale and increasing loyalty to generating and “encouraging” initial consideration. McKinsey & Co. iterates that money spent on loyalty programs may be misplaced as “active engagement in loyalty programs” is slipping. It is McKinsey & Co.’s opinion that the slippage in loyalty program involvement is a result of changes in the way customers shop.

Here is another common sense idea. There is a simple law of marketing life. 100% of a brand’s current customers will die. Every brand needs to attract new customers to stay strong. Every brand needs to keep its customer base loyal. For enduring profitable growth, attract new customers, increase consideration, convince them to purchase, increase repeat purchases, increase loyalty.

Consideration is critical. Common sense. But it is only part of the picture when it comes to purchase and repurchases over time. Loyalty is the lifeblood of a brand. Failing to reinforce brand loyalty is like trying to fill a leaky bucket.

In order to build strong brands, you must move customers up the Brand Preference Ladder. It is all about increasing commitment to a brand.

Awareness: Awareness is a “yes or no” issue. A prospect is either aware of the brand or not aware of the brand. It is like a light switch: on or off. There is no in between position.

Familiarity: Among those who are aware of the brand, how familiar are they with the brand? Familiarity means a person feels they are sufficiently aware of the brand to express an opinion. Familiarity is a feeling. The familiarity scale goes from unfamiliar, somewhat familiar, very familiar, to extremely familiar.

Willing to consider: Among those who are familiar with the brand, are they willing to consider the brand? Price and convenience are often differentiators.

Short-list: A customer’s short-list of brands is the primary, personal competitive set within which the customer is most likely to make a final purchase decision. Consumer behavior research suggests that the typical size of this competitive set is three brands. Being on the short-list of considered brands prior to the purchase is a big competitive advantage.

Preference: Within the person’s short list, is the brand the first choice? How do they rank the brands in their short list? It should be every brand’s goal to be the preferred, first-choice brand.

Enthusiasm: Brands in this category are brands that the customer not only prefers but also is willing to buy even when their second choice brand costs 10% less. Among those people who say the brand is their #1 choice, would they still choose that brand if their #2 brand were priced at 10% less? These customers who say “YES, I will still choose this brand even if it is more expensive than my second choice are brand enthusiasts. A brand’s ultimate goal is to increase brand enthusiasm.

Growing brand consideration, preference and commitment is a profitable progression up the Brand Preference Ladder. Consideration is critical. It is the opening gate to purchase. Customers are not likely to purchase brands they will not consider. Demonstrating a high correlation between consideration and market share is simply a demonstration that common sense makes sense. Implying that building brand loyalty is not also important makes no sense.

Contributed to Branding Strategy Insider by: Larry Light, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I

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Illusion Unveiled

The problem is that this linear model is an illusion. Human beings simply don’t work this way — ever. Instead, a consumer’s path to purchase takes a circuitous route, moving forward, going sideways, circling back, overlapping and sometimes, if a brand is lucky, a consumer pulls the trigger. But rarely, if ever, do they proceed along a straight line.

And complicating the matter further, the customer journey has become even more convoluted with the rise of digital shopping, IBM’s U.S. Retail Index claims accelerated five years into one during the pandemic.

Digital Thruway With Roadblocks

Digital shopping reached nearly $1 trillion in 2020 according to the Census retail report, rising 22 percent over 2019 after a 30 percent increase year-over-year in 2018. With retail sales totaling roughly $4 trillion in 2021 (excluding motor vehicles and parts, gas stations and food services), online shopping represents about one-fourth of all retail purchase transactions. And equally impressive is the influence of digital on brand awareness, familiarity and consideration in the traditional path to purchase model.

Now that the customer journey has been permanently rerouted onto digital rails, it’s become a labyrinth of intersecting pathways with many potential dead ends: Forget a straight line.

And more confounding, the end of the journey may actually be the consumer’s starting point.

Start At The End

Consumer psychologist and founder of Buycology, Chris Gray, suggests another way to plot the customer journey. Start at the end and backtrack to understand the route customers take to get to purchase. The emotional aspects influencing purchase are as important as the digital or physical pathway.

Gray explains, “Consumer behavior is always a means to an emotional end,” he says. By understanding the emotional result consumers’ are looking for, brands can better understand and anticipate consumers’ behavior – their path to purchase.

While we tend to think of consumers driven by material needs –needing something – the emotional needs are stronger and more compelling. And fortunately, emotional needs are reliably predictable. “Consumers are people and people are driven by the same core needs,” explains social psychologist Erica Carranza, vice president of consumer psychology at Chadwick Martin Bailey.

“We all strive to maximize positive emotions, enhance and express our identities, cultivate social relationships and effectively achieve our goals. Because these are core human needs, brands that help people fulfill these needs drive consideration, trial, loyalty, and advocacy,” she says. “People are 30 times more likely to try a brand if they expect it to deliver strong emotional, identity, social, or functional benefits,” she adds.

In the traditional linear path-to-purchase model, the functional benefits of a brand – it’s features and benefits – tend to be the bait brands use to draw customers along their path. But a much more enticing lure is the promise of emotional rewards. That is what consumers value most and that means brands must talk values at every touchpoint in their customer journey.

The brand that speaks customer values best and most consistently is the one where the consumer will arrive at the desired endpoint – a successful transaction.

What Consumers Value Determines What Path They Take

Brands must talk values to the consumer; but the key question is what do people really value? That is actually a loaded question because value is multidimensional operating on three different planes. Let’s break it down:

1. Value is realized through the shopping experience. This includes attributes such as convenience, product assortment and arrangement that makes it easy to find what is wanted, special promotional offers and incentives (which is distinguished from product price), customer reviews and customer service – another highly personal concept, but customers know it when they get it. What a brand wants to sell can’t be divorced from how it is sold. This is why so many brands are going the direct-to-consumer route, rather than relying on multibrand retailers even though these retail partners have a built-in customer bases which can’t be dismissed.
2. Product features deliver value. Product-specific features include many different factors depending upon the vertical. For example, both home furnishings and fashion must fit and they must be styled right. Cosmetics and performance products, like housewares, appliances and tools, must work with a minimum amount of effort or time expended. All must be priced right within the customers’ budget. And all products must meet the customers’ standard of quality. No brand can go wrong by offering the highest standards of quality. Everyone wants to buy the best that their budget can afford. Increasingly the trend is toward consumers buying fewer but better things, favoring brands that do what they promise over a long time and won’t end up in a landfill.
3. Corporate values speak to consumers’ values. What a brand stands for – the values it upholds – are growing in importance. Brand ethos is not to the exclusion of shopping or product values, but reinforces them. Corporate social responsibility and environmental mission statements aren’t the reason people buy a brand or shop at a store, but they may be the reason why they choose one over another.

Dangerous Curves Ahead

Corporate values can be a slippery slope, however, especially if brands lean into divisive, politically-charged issues where the danger is alienating 50 percent of target customers. Brands should be careful to align themselves with commonly shared societal values all or most of their stakeholders can agree upon.

Trusting a company to do the right thing for them personally and for society at large is what consumers expect. The danger is doing the politically trendy thing today that could change tomorrow. The current view is not to sacrifice the greater good for more profit.

For example, when CVS decided to stop selling tobacco products because it violated the company’s mission of “helping people on their path to better health,” that was a decision even smokers could understand.

On the other hand, it’s a matter of debate with many corporations speaking out against Georgia for its new voting rights act. Walmart set a pragmatic course in a statement made by CEO Doug McMillon stating the company is “not in the business of partisan politics.”

Blazing A New Trail

“Every day, people form impressions of brands from touchpoints such as advertisements, news reports, conversations with family and friends and product experiences,” states a McKinsey study of the new customer journey. “Unless consumers are actively shopping, much of that exposure appears wasted. But what happens when something triggers the impulse to buy? Those accumulated impressions then become crucial because they shape the initial consideration set: the small number of brands consumers regard at the outset as potential purchasing options.”

The majority of impressions that put a brand into a consumer’s consideration set aren’t necessarily or even mostly rationale or objective, but emotional.

Emotions can run hot and cold, but one thing is for sure, consumers on their path to purchase want to maximize the positive emotions and minimize the negative ones. Brands talk a lot about removing friction in consumers’ path to purchase. However, rather than just removing friction, they should be adding joy, meaning and enrichment into every step of the process.

Contributed to Branding Strategy Insider by: Pamela Danziger, Owner, Unity Marketing

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It used to be a principle of marketing that a brand needed trial and repeat before you had brand loyalty. In fact, at the haven of marketing, P&G, the concept was three tries before you could feel comfortable that a customer had become a loyal customer.

And, this makes sense. Brand loyalty is purchase behavior based on actual preference for the brand. Brand loyalty is behavioral and attitudinal commitment over time. Brand Loyalty is based on customer conviction that this one brand is the superior alternative for satisfying a particular want in a particular occasion.

More than just repeat behavior, brand loyalty is like a ladder. There are degrees of commitment to the brand. A marketer’s goal is to move a customer up the loyalty ladder from commodity consideration to short-list brands to preference and, ultimately, to true brand loyalty. It is rare, even with durable goods products, to have true brand loyalty or even preference after one trial. Of course, it is possible, but loyalty, which includes a trust factor, is earned over time. And, in new categories, such as electric vehicles (EVs), where there is learning and where there are many new options across many brands, trial can be expected.

However, somehow, this idea of building brand loyalty is being tragically tossed into the trash. This is a huge mistake. Not a good omen for brand owners.

This is why The Wall Street Journal story titled, “With New EVs Arriving, Brand Loyalty Goes Out The Window” is so unfortunate. The article’s premise is that drivers of EVs have been switching brands. It turns out that first time EV buyers who are now looking for a replacement are selecting from a different brand.

So? This does not mean that brand loyalty is dead or “going out window.” It may mean that the driver was not “loyal” in the first place. It may be that when the first EV was purchased, the selection was limited so the driver opted for what was available. Or, as in the case of the Chevy Bolt, the model was recalled and sales halted due to battery fires.

The Wall Street Journal did point out in a subsequent story that there is a lot of “jockeying” happening among the auto brands. The hope is to attract those early EV adopters. Ford CEO Jim Farley said he hoped that this activity in EV would throw all brand preferences up into the air. Clearly, he is hoping that drivers move away from Tesla.

Data cited from Edmunds indicates that 80% of people who bought a Kia EV6 early this year have traded in that vehicle for another brand. Perhaps the Kia EV6 did not live up to expectations. Bloomberg’s Green Rating put the KiaEV6 below many other EV brands. To turn over a vehicle within a year means that the brand probably did not deliver on its promise or had “issues” with maintenance. Or that a competitive brand appears very attractive.

Other Edmunds data show that people who purchased a Ford Mustang Mach-E traded in a non-Ford vehicle. OK, so perhaps that driver really craved an electric Mustang. A Mustang is an iconic vehicle. The data cited do not indicate whether the trade-ins for EV Mustangs were electric or hybrid or gasoline powered. People wanted the Mach-E.

JD Power research among 2000 car shoppers revealed that “only 3 in 10 customers were able to find an EV that works for them in terms of price, vehicle type and other factors.” For example, General Motors introduced the pricey EV Hummer and the EV Cadillac Lyriq SUV. Neither did much for GM’s bottom line nor for its expertise in EVs. The EV Hummer sold 854 vehicles. The much-hyped Lyriq sold 122 vehicles.

One customer interviewed told The Wall Street Journal that he was a Chevy Volt plug-in hybrid owner who wanted to trade in his 10-year-old vehicle. He said that he had once owned a VW so he looked at the ID.4 from Volkswagen and he looked at the Kia EV6. He found it difficult to find either vehicle so he purchased a Hyundai Ioniq 5. He said, “I was definitely still partial to Volkswagen, but Hyundai won me over. I love it.” He also indicated that “if all things went well” he might consider buying a Hyundai for his next purchase.

Why is this brand loyalty going out the window? This is the opportunity to build brand loyalty.

What The Wall Street Journal gets correct is that in this relatively new category with options beyond just Tesla, drivers are shopping around. Yes, drivers are learning the category. And, yes, drivers are trading in their current models which may not be the same brand as the new EV being purchased. After all, the data indicate that currently there are 53 EV models available now. That was not the case for the early adopters when Tesla, Volt and Leaf were the only vehicles. (By the way, there were 625 vehicle models sold overall in 2022.) And, EV sales were 6% of the market in 2022, up from 3% in 2021.

Other JD Power data show that on average only 50% of new car buyers buy from their current brand. The idea that a driver purchasing a brand of vehicle will buy that same brand next time is only true half the time.

The EV category is beginning. And we should expect a lot of “jockeying.” But, the automotive industry also has a problem regarding customers and loyalty: its persistent belief in the Allison-Fisher Funnel approach to a car purchase. The Allison-Fisher Funnel is an outdated marketing approach. With this model in mind, a potential car buyer is in a funnel moving through various stages from awareness to familiarity to opinion to consideration to make-model intention, shopping and purchase. The dealer wants to own the customer through the process and capture the sale at the end of the funnel. The dealer believes that once the driver is through the funnel, the driver is now a committed customer. But, just because a driver purchases a vehicle does not mean instant loyalty.

They call this Conquest marketing.

Conquest marketing is about seizing, catching, capturing, vanquishing or triumphing over prospects that are shopping at rival dealers, convincing them to buy from your dealership. With conquest marketing, every sale is a singular event. With conquest marketing, every sale is an in-the-year-for-the-year sale. Brand loyalty is disregarded.

In conquest marketing, a conquest sale is a term describing a sale to a particularly hotly contested customer, who does not have a specific reason for shopping at one store over another or for purchasing a particular item or service over another.

Another problem with the Allison-Fisher Funnel is that there is little or no place for brand and dealership loyalty. Every customer is a new customer to be won over.

A primary goal of marketing is to create, reinforce and broaden the base of customers who are loyal to the brand and/or dealership. EV dealers and their manufacturer brands must change their perspective on brand loyalty. Winning new customers is important. But, building, maintaining and reinforcing brand loyalty are critical. And, the current marketplace, where shopping around and trying new vehicles, does not reflect the last days of automotive brand loyalty. This is the beginning of EV brand loyalty not the end.

Contributed to Branding Strategy Insider by: Larry Light, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I

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Lululemon, maker of upscale athleisure clothing, is creating a membership program – lululemon Studio – around its Mirror connected fitness device, that will offer members access to “… thousands of streaming and in-person workout options (more than 10,000), receive perks and discounts on lululemon apparel, attend classes at stores for free and have early access to in-person lululemon events,” according to The New York Times. The Mirror device must be purchased for membership. The price of the Mirror will be lowered to $795 the first week in October and the membership fee will be $39 a month. Existing Mirror subscribers are automatically added to the program at no additional cost. Lulemon’s CEO told The New York Times that Mirror users were becoming increasingly loyal to the lululemon brand. The lululemon brand is known for having a very loyal community.

The Wall Street Journal has a membership program – WSJ+ – that offers subscribers wide variety of experiences for current users. There is a weekly members-only newsletter detailing events, offers, insights, prizes and experiences packages that include trips, discussions, free audio books, educational courses, cooking classes, virtual tours and passes for galleries. Each member receives a complimentary audio book each month. The Wall Street Journal designs its membership rewards to extend The Wall Street Journal beyond just hews.

These brands have figured out that having a membership program is not the same as having a meaningful membership program.

In our highly fragmented, uncertain world, people seek connections. Individuals form groups around brands because brands provide functional, social and emotional meaning. People want to associate with and be involved in a brand’s experience on a continuing basis. They want to belong to the brand’s group.

People want to be respected for their individuality. At the same time, people want a feeling of belonging to something meaningful. Joining a database and receiving a reward is not enough. Sure, it is great to be able to move to the front of the line when boarding a plane. But, is there a meaningful community around American Airlines? People want meaningful membership.

Meaningful membership programs allow people to join together around a brand for mutual benefit or some common reason. Meaningful membership programs are groups of like-minded individuals who are fully engaged with the brand’s experience. Just as frequent, repeat purchase is not the same as loyalty, not all membership is loyal membership. As with Taco Bell, lululemon and The Wall street Journal, a critical goal is to help members of the program increase their loyalty, moving from being merely opt-ins to advocates.

Meaningful membership programs have dual benefits. People reinforce their individual identity while augmenting their social identity through communication and connectedness of shared experiences, values and pride of belonging. These elements are what make membership meaningful.

For example, community building is at the center of lululemon’s brand. Fans recognize that connecting members in relevant, differentiated ways is one of the ways lululemon has become so popular. The new lululemon Studio program provides community members with a hybrid exercise solution. As the Chief Brand Officer said upon the lululemon Studio unveiling, “…lululemon Studio unlocks the versatility (i.e., hybrid fitness options) our community has told us they are looking for.”

Brands such as Netflix, Spotify and other streaming services focus on gaining subscribers. These brands do not focus on building a membership community of increasing loyal users. For many subscriber brands, the goal is to capture new subscribers. Some marketers believe their brands can survive on just gaining new customers. But, brands cannot survive by just focusing on acquisitions alone. As Taco Bell, lululemon and The Wall Street Journal demonstrate, the first priority must be to adore the core customer base. New customers are important, of course. After all, people age out of a brand. To generate enduring profitable growth, brands must focus on gaining new customers and keeping current customers.

Many acquisition-focused brands are learning that not only does it cost more to acquire members, ignoring loyalists hurts profitability.  Recent data from a survey of CMOs shows that customer acquisition budgets are 14.7% larger than customer retention budgets. Only recently, have brands, such as Disney+, realized the need to focus on building brand loyalty. However, announcing growing numbers of new customers in analyst meetings is an addiction that is difficult to break.

Which is really sad, because research shows significant economic advantages and financial returns from highly involved, participating community members. Participants in membership communities are more loyal, less price-sensitive, more resistant to competitive promotions, more willing to recommend, buy more and are more profitable.

A recent Wall Street Journal’s Heard on the Street column focused on fast food restaurants and the battle for the breakfast daypart. The article ends with a comment about building brand loyalty. “The battleground has moved to loyalty programs that reside on your smartphone. Breakfast may be the most habitual meal of the day for those who get it to go. Now chains want to use technology and rewards to reinforce that behavior.”

Part of the problem is that many marketers just misunderstand brand loyalty. They assume that behavior is all that matters. This is wrong. Brand loyalty is committed brand behavior. In other words, there is an attitudinal element to brand loyalty that is critical. Meaningfulness is one of those attitudinal rewards.

Not all loyalty programs create meaningful membership. Rewards are good. But, real loyalty requires strong commitment.

Many loyalty programs just ask customers to sign in, to register or to enroll. From then on, the rewards are merely frequency-based. However, meaningful membership means creating and reinforcing the personal feeling of specialness and the group privileges of belonging to a membership. Reinforcing brand behavior – how many times the member “frequents” the brand is not sufficient. Behavior is only half of the story when it comes to meaningful membership. Attitude is critical. For meaningful membership to develop, there must be true commitment to the brand.

Meaningful membership builds trustworthy brand value leading to high-quality revenue growth. Meaningful membership helps increase brand loyalty. Meaningful membership creates brand enthusiasm. It creates brand adherents. It is the basis of generating enduring profitable growth of the brand.

Contributed to Branding Strategy Insider by: Larry Light, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I

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Recently, there have been many articles describing the impact of higher prices and lack of product availability on brand loyalty. These articles and opinions state that when consumers do not see their favorite brand due to supply chain issues or price increases, consumers buy some other brand. The conclusion is always that consumers are no longer loyal to their favorite brands. In most cases, the stories feature supporting data showing that consumers are shifting their buying behaviors to new brands or familiar but never purchased brands such as private label brands.

It is possible that by switching brands, consumers may find a new brand that they love. And, that would be great. However, assuming that a change in purchase due to difficult in-store circumstances is destroying brand loyalty is just not true.

The pundits, journalists and researchers seem to be overlooking some basic tenets of brand loyalty. Let’s look deeper into brand loyalty.

One: brand loyalty has two dimensions: behavioral and attitudinal. Behavioral loyalty refers to purchase frequency. Attitudinal loyalty refers to the emotional commitment a customer has for the brand. It is a mistake to look only at the behavioral aspect of brand loyalty, as it is possible to create frequent buying based on deals, lack of availability and/or price changes. Repeat purchase in and of itself is not brand loyalty. And, deal loyalty is not real loyalty. Attitudinal loyalty that is based on deep brand commitment, affects repurchase intentions, consumer willingness to recommend to others, and price tolerance. Repeat purchase based on attitudinal commitment to the brand is the true measure of brand loyalty. Focusing on behavioral loyalty alone is misleading.

Two: brand loyalty is not an on-off switch. Customers are not loyal or disloyal. Brand loyalty is a matter of degree. Customers are more loyal or less loyal. It is the degree of commitment to a customer’s preferred brand. As brand loyalty increases resistance to competitive brand marketing activities also increases. Switching to a new brand due to in-store issues may not generate a lot of loyalty towards the new brand. The new brand may be a stop-gap measure.

Three: in our data-driven world, marketers tend to look only at behavioral datasets. Any review of the marketing literature will reveal that loyalty is almost always defined behaviorally. Either brand loyalty will be defined as a share of requirements measure or as a pattern in choices often using an experimental design. Citing a correlation such as not-on-the-shelf relative to buy-another-brand is not the same as causality. Having to buy a different brand does not necessarily mean that the favored brand in no longer the favored brand.

So, in “Brand Loyalty Takes A Hit From Inflation,” The Wall Street Journal, cites two separate research studies, both focused on consumer behavior. One of these studies showed that if a favored brands were not on the shelf, the favored brand lost “share of wallet” – a share of requirements term the study uses for brand loyalty.  Share of wallet is a term for the percentage (“share”) of a consumer’s expenses (“of wallet”) that a consumer spends on a brand. There are some data showing correlations between share of wallet and brand loyalty. However, share of wallet is sometimes defined as a consumer’s purchase of a particular brand over a period of time.

For example, a consumer may stop at the same drive-thru for breakfast every day, increasing the frequency of usage. That frequency may be attributed to other things than brand loyalty such as being on the right side of the street, having a double drive-thru or breakfast promotional deals. Or, a person may commute frequently by plane to a city serviced by only one airline. That airline has a huge share of wallet from this traveler but it is not necessarily a reflection of brand loyalty. Brands do not own the consumer. Brands should not confuse repeat purchase with brand loyalty.

Four: sadly, The Wall Street Journal article associates “convenience” with brand loyalty. Convenience is not a good criteria for brand loyalty. No one wants inconvenience. All brands must be easy to choose, easy to use and provide ease of mind. Inconvenience is a cost that consumers factor into their assessments of brand worth. Being “convenient” is a generic definer.

Five: the era of exclusive brand loyalty (i.e., loyalty to one brand in a category) ended ages ago. We live in a world of multi-brand loyalty. People used to say, “This is my favorite exclusive brand.” Now, they have more than one brand to which they are loyal because they see more than one brand that is good quality and provides value. Consumers have a consideration set of brands to which they have varying degrees of loyalty. Consumers may find that their first choice brand is not available nor affordable but their second choice brand is available and affordable.

Six: it used to be that a loyal consumer would buy their first choice brand even if it meant shopping at a second store. But, right now, with the price of gasoline, no one is really interested in driving to a second store for their favorite brand when that brand is not on the shelf in the first store. Shopping around for a bag of laundry pods is just not affordable. The consumer will probably switch to an available brand. Data from Kroger, the large grocery chain, supports this: “More than 90% of consumers say they will buy another brand if their preferred choice” is not available. Assuming that this means brand loyalty is dying is a stretch. Consumers may still harbor attitudinal attachments to favorite brands.

Seven: at some point, price sensitivity pops up, no matter how loyal the consumer. Many favored brands thought they could pass along supply chain surcharges to the consumer. These brands recognized that a loyal consumer is less price sensitive. But, these favorite brands did not conduct price sensitivity research to learn just how much prices could be raised. These favorite brands did not consider that at some point the consumer will see the cost of the brand as too high for the brand experience. Instead of rewarding loyal consumers, brands took advantage of them by raising prices too high.

Today’s economic brand-business situation is similar to the early 1990’s. At that time, there was a lot of hand-wringing over the imminent death of brand loyalty. Step into the time machine and go back to April 2, 1993, a day of stock market infamy called Black Friday. On that day, Marlboro cigarettes announced that the brand (one of the world’s most popular and profitable, as The Economist pointed out) was losing smokers to cheaper brands. Of course, Marlboro’s stock tanked. But so did the stocks of other consumer goods. Polling and other market research showed that brands had raised prices creating huge price disparities between them and store brands. The Economist (June 5, 1993) described the situation as follows:

“Partly this is due to recession and to consumer-goods firms jacking up prices on many brands until there is a huge discrepancy with own-label rivals.  Last year Kraft was forced to slash prices when it began losing sales to own-label cheeses that were 45% cheaper. Last month P&G cut prices for the same reason on its two leading brands of nappies, Pampers and Luvs. Consumers have discovered that the quality of many own-labeled goods is just as high as that of established brands.”

Of course, since then, most of these branded consumer goods have not faded away. Nor have their cadres of brand loyalists. Brand loyalty did not disappear. And, it is not disappearing now.

As for the new brands consumers are now buying, these brands should be employing brand loyalty management techniques to convert category shoppers (those who are brand indifferent and see brands as parity) up the loyalty ladder to the point where they become “brand enthusiasts“. These loyal consumers have a propensity to account for a greater share of a brand’s overall profits. They are also less price sensitive and will actually pay more for a product up to a point. Creating and reinforcing brand loyal consumers is the only enduring basis of growth.

Contributed to Branding Strategy Insider by: Larry Light, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I

What drives loyalty for your brand? The Blake Project’s brand equity measurement system is comprehensive, measuring each of the five drivers of customer brand insistence – awareness, relevant differentiation, value, accessibility and emotional connection – along with other factors such as brand vitality, brand loyalty, brand personality and brand associations. Contact us for more on brand equity measurement

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